Duplex Products Inc. History
Sycamore, Illinois 60178
Telephone: (815) 895-2101
Fax: (815) 895-7028
Sales: $275 million (1996)
Stock Exchanges: American
SICs: 2758 Commercial Printing; 2761 Manifold Business Forms; 2678 Stationery, Tablets & Related Products
Duplex takes pride in its team of business specialists with a total market orientation. We offer the most extensive printing and distribution services in the industry; engineering and research professionals who understand your business requirements; responsive sales consultants dedicated to finding creative solutions for your concerns; and a performance-based reporting system to measure our success.
Duplex Products Inc. is one of America's leading manufacturers and suppliers of business information products, services, and technologies. The company offers a comprehensive array of paper-based and electronic-based business information products, including custom and stock business forms, custom and stock pressure sensitive labels, integrated form/label combinations, electronic printing and mailing services, forms management services, and a wide variety of services related to check fraud prevention, electronic forms, and information flow services. Duplex Products Inc. has manufacturing plants located in ten states across the United States, and numerous direct sales offices throughout America and Puerto Rico. Yet during the early 1990s the company experienced the harsh reality of shrinking markets and intense competition. In the spring of 1996, with declining sales and a recent reorganization program less than successful, the company was purchased by Reynolds and Reynolds Company, one of the largest manufacturers and distributors of business information products in the country.
Founded in 1947 by a group of businessmen interested in taking advantage of the growing market for business forms within both the local and federal governments, Duplex began to design and manufacture simple business forms such as carbon copies, invoices, and a wide variety of other information materials. At first, the firm specialized in designing stock business forms and labels, but within a few years branched out into the design and production of custom business forms for regular government clients. At this time, most of the company's designs were for either hand-written forms or for forms inserted into manual typewriters. Although the firm grew slowly, it gradually carved a niche for itself as one of the pre-eminent business forms manufacturers and suppliers in the Midwestern United States.
As the company's reputation grew during the 1950s, management began to broaden the scope of its products and services in order to keep pace with the needs of clients and the changing nature of information management. Although carbon-based business information forms remained the company's primary product, management began to expand its products and services to include customized labels, continuous and multi-part custom business forms, and a consulting arm to advise clients how to improve the processing of information while lowering costs at the same time. These added products and services brought more and more new clients to the firm, from industries as diverse as retail, industrial, and financial, and sales began to increase dramatically.
During the 1960s and 1970s, the company continued to expand its product line. Forms for management services, printing services, and various other documentation were designed and manufactured by the company. As sales and services began to increase, Duplex began a comprehensive training program for its marketing employees on new selling techniques. This program soon became one of the most important within the company since it served as the impetus for establishing sales offices throughout the United States. During the late 1970s, the company began to open business service centers for its expanding list of clients, including warehousing, customer inventory management and reporting, and various on-site business form productions. By 1978, sales had surpassed the $200 million milestone and, even though one major company maintained a stranglehold on the business forms industry, Duplex was quickly becoming one of the premier manufacturers in the marketplace.
Expansion and Growth during the 1980s
During the late 1970s and early 1980s, the business forms industry experienced a downturn following the fortunes of the American economy. However, when the economy began to recover in 1982, Duplex took advantage of the opportunities and increased its market share and profitability. By 1984, the company reported sales of $242 million, an increase of nearly 17 percent over the previous year, and its momentum did not appear to diminish in the least. Management decided to sell its wholesale office-supply division during this time, but reaped the rewards of a higher consumer demand for its products, increased productivity, and lower than average raw materials costs. During the same year, the company upgraded much of its equipment and manufacturing facilities within the United States. A catalogue sales facility was built in Mechanicsburg, Pennsylvania, and the company's existing forms plant in Orlando, Florida, was completely replaced with a newer, modernized facility. Major renovations were undertaken at the company's West York, Pennsylvania plant, along with numerous others along the East Coast. In addition, demand for the company's Form/Serv systems was also growing. Designed to computerize the ability of a customer to reorder forms, control inventory, identify obsolete forms and provide various other business forms analyses, the program was one of the most successful ever designed and manufactured by Duplex. By 1985, Duplex was operating 15 business forms manufacturing facilities in the United States, and was planning to open another plant in Salt Lake City, Utah.
Projections for future growth gave management even greater confidence in the company's future. The United States Department of Commerce issued a report for the year 1984 which reported a total of $5.7 billion in business form shipments. This amount was expected to increase by an average of 5 percent through the late 1980s. Most of the increased demand for business form products and services was the result of phenomenal and unexpected technological advances in office automation and data processing, closely connected to the expanding use of word processors and microcomputers by businesses of various sizes. The Department of Commerce further estimated that over three million microcomputers were being employed by companies and organizations throughout the United States, and the percentage of installations of such equipment was expected to grow by approximately 20 percent from 1985 to 1990. Thus Duplex management was anticipating an increase of between 10 and 20 percent in shipments of its business forms materials. The predictions by the Department of Commerce proved true. By the end of fiscal 1985, Duplex Products reported sales of $326.5 million, the best year for sales revenues in the company's history.
Industry Changes during the late 1980s and early 1990s
Although management was confident that the company could sustain its rate of growth and continue to increase its sales volume, the market for traditional business forms in the United States gradually began to decline during the late 1980s. Operating in a highly competitive and extremely mature market, Duplex felt the initial effects of vast industry changes. Large corporations and organizations moved away from paper-based information systems for two reasons: the expanding use of personal computers to store information and the technological advances in document publishing software packages that enable firms to design and print a wide variety of business forms on their own. By the early 1990s, approximately 20 percent of the $8 billion business forms industry was controlled by one large competitor, and the remaining market was shared by some 600 other companies. Duplex had grown so quickly and so large that it was ranked as the sixth largest among these companies. Yet this was somewhat of a dubious achievement since the excess of supply over demand was crowding firms out of the market. In an industry where pricing structure, paper quality, on-time delivery, and customer service were the most important competitive factors, over-capacity was giving rise to pricing pressures that most companies, including Duplex, could not overcome.
By the early 1990s, Duplex Products was producing a wide variety of business forms and offering a comprehensive array of services from ten facilities located in Illinois, Pennsylvania, Indiana, Florida, Ohio, California, Utah, Maryland, and Georgia. One of the most promising developments during this time was the establishment of a envelope manufacturing operation, Puerto Rico Envelopes, Inc., situated in Bayamon, Puerto Rico. With a lower wage scale than the company's continental U.S. operations, management intended to drastically reduce its overall operating budget. These developments appeared somewhat to counteract the industry trends of increasing competitiveness in an overcrowded market. Unfortunately, however, after a lengthy period of time which saw a decline in paper prices, suddenly bond paper prices dramatically shot up. The company's selling prices were adjusted to reflect this increase, but pressure on profit margins remained intense, and the marketplace became all the more competitive. By the end of fiscal 1993, Duplex Products reported a drop in sales volume to $258 million.
Restructuring during the mid 1990s
In 1993, Benjamin L. McSwiney was hired as president and chief executive officer of the company, and given the authority by its board of directors to do whatever was needed to reverse declining sales and shrinking profits. McSwiney, who had extensive management experience and had served as president of WhiteStar Graphics and general manager of Williamhouse Regency, immediately implemented a comprehensive and far-reaching restructuring program designed to revitalize the company's prospects. To reduce operating expenses, he closed six of the company's facilities, and abruptly terminated nearly 30 percent of its entire workforce. The company sold its envelope manufacturing plant in Puerto Rico and its catalog operation at approximately the same time. To emphasize his no-nonsense approach in turning Duplex Products around, he replaced eight of the firm's nine senior management executives and issued a memorandum stipulating the a large percentage of the company's products were to be outsourced from that time forward.
At the same time, McSwiney launched a major corporate initiative that was designed to add a broad range of new products, services, and technologies to its existing line of traditional business forms and products. The new president saw high potential growth in areas such as pressure sensitive labels, short-run preprinted cut sheets, electronic printing and mailing services, demand printing, and forms automation. Implementing services that assisted customers in reducing their cost and handling of information, including the integration of electronic and paper documents, and the development and enhancement of new business processes, were regarded as forerunners of a more prosperous future. McSwiney was convinced that the increase in information generated by the expanding age of computer processing would increase opportunities in the field of paperless communications, and enable companies like Duplex gradually to replace the declining segments of the traditional paper-based business forms market with high technology products and services for the electronic information highway.
Unfortunately, sales continued to spiral downward. Above normal price discounting within the business forms industry, large increases in bond paper prices, and growing selling expenses placed Duplex in a vulnerable economic position. Unable to satisfy the growing demands of the company's board of directors for an immediate turnaround, and unable fully to implement his strategy for reinvigorating Duplex Products, McSwiney was forced to resign in June of 1995. At a special meeting of the board, Andrew A. Campbell, vice president of finance and chief financial officer, was appointed the new president and CEO of the company. Prior to joining Duplex, Campbell had served as the vice president and chief financial officer of General Electric's Motor Group. More comfortable with the conservative Campbell, the board of directors gave him the directive to turn the company around as soon as possible.
Campbell continued, albeit at a slower pace, the electronic-based solutions, the emphasis on customer service, and the development of cost-effective business information forms that McSwiney had initially designed and implemented. New products and services were also introduced, including personal computer-based requisitioning software, a highly sophisticated check fraud prevention program, and an information process analysis service. Campbell also poured significant amounts of money into the company's electronic printing and mailing centers located in Chicago, Illinois, and Baltimore, Maryland, and the recently acquired facilities in Sacramento, California. The resignation of McSwiney and the efforts of Campbell, however, did not provide the solution to Duplex's problems. In the spring of 1996, unable to prevent the loss of the company's market share, the decline of its sales volume, and the growing perception that Duplex Products was not positioned well enough to recover from its tribulations, the board of directors decided to accept an acquisition offer from Reynolds & Reynolds, one of the largest business forms manufacturers in the industry. As of the summer of 1996, details concerning the acquisition were still pending, but it was agreed upon by industry analysts and representatives from both companies that the purchase of Duplex Products by Reynolds & Reynolds was a done deal.
The future of Duplex Products, Inc. is uncertain. Reynolds & Reynolds, the company's new owner, might decide to partition its operations, and sell off those that are less profitable, while reorganizing the high technology services to provide maximum profitability. Or the new management might decide to pump significant amounts of capital into its operations in order to revive the company's deteriorating market share. Whatever happens in the future, Duplex Products is certain to undergo many changes.
- "Catching Up," Barron's, May 13, 1985, p. 57.
- Cohen, David, R., "Office Equipment and Supplies Industry," Value Line Investment Survey, October 28, 1994, pp. 11-16.
- "Duplex Products, Inc.," Barron's, December 17, 1990, p. 61.
- "Duplex Products Purchase Completed for $90 Million," Wall Street Journal, May 21, 1996, p. C4(W).
- Murphy, H. Lee, "Duplex Products Forms Plan to Reverse 5 Years of Decline," Crain's Chicago Business, March 20, 1995, p. 34.
- "Outsourcing Forms Trims Buying Tab," Purchasing, February 16, 1995, p. 77.
Source: International Directory of Company Histories, Vol. 17. St. James Press, 1997.